Tuesday 17 July 2018

GAA county champion O'Neills to celebrate 100th birthday in style

Manufacturing in Ireland means the local champion is nimble enough to get around the opposition, but tackling Brexit won’t be easy, writes Ellie Donnelly

Kieran Kennedy has seen O’Neills grow its brand internationally since he started
Kieran Kennedy has seen O’Neills grow its brand internationally since he started
Ellie Donnelly

Ellie Donnelly

The O'Neills brand is as ubiquitous in Irish life as Tayto crisps or Guinness stout. The family-owned business, which this Saturday celebrates its 100th birthday, has always been synonymous with the GAA, though today its reach goes far beyond the amateur codes.

Today the business is owned by brothers Paul and Tony Towell, who between them have worked at O'Neills for almost 100 years.

For close to 40 years, the current O'Neills boss Kieran Kennedy has been part of the story.

Born and raised close to what is today O'Neills Strabane factory in Co Tyrone, Kennedy joined the business straight out of grammar school, initially working as a stock control clerk.

Today he is managing director and the business employs more than 800 people, mostly at its Strabane and Dublin factories.

Expansion has been gradual, Kennedy says, with growth really following customer demand.

In the earlier days, the Strabane plant made shorts and tracksuits, sending a lorry to Dublin once a week with all of its production output.

"At the time the factory was just a converted school house - the St Mary's convent primary school - it was 7,000 sq ft, and there were only 30 people employed.

"There was always a huge demand for the products, but we were limited in space. When I took over as manager, in 1988, the first thing I said was that I would never let a customer down or never refuse an order, so in order to maximise our production we rented some industrial units nearby."

As demand increased the firm went on to expand to a 32,000 sq ft unit as it ramped up production.

As a manufacturer in Ireland, O'Neills has bucked the trend of clothing production being shifted to Asia or outsourced to third parties

It's best known for GAA county gear, but O'Neills supplies kit across a wide range of sports including soccer, rugby, boxing, basketball, athletics, and netball.

Kennedy says that the company's focus on the customer has been key.

Crucially, much of its reach is into club level, where the high degree of individualisation creates the niche where a domestic business can compete.

"We are turning around our orders, on average, on a two-week basis," said Kennedy.

"Our whole emphasis is about our customer and giving the customer what they want. A big part of our business is about personalisation, making [garments] for clubs and giving them exactly what they require," Kennedy says.

O'Neills knits and dyes its own fabrics. That makes it more competitive at getting product onto shelves and out to clubs, not less, Kennedy says.

Keeping on top of the latest technology is crucial, he adds.

"It is all digital technology now and we are at the top of the game in terms of our production.

"From cutting by hand and knitting singly, that has all evolved whereby the jerseys are now all designed on computer and printed out onto paper and then applied onto fabric."

The culture of the business remains family-oriented, Kennedy says.

"When I joined, the company was run by Paul O'Neill, whose father founded the business in 1918.

"We had lots of communication and they [the family] were very supportive of us here in the North. They always supported any decisions that were required to expand, never held back."

The conversation moves, inevitably, onto the GAA - O'Neills has kit deals with 31 of the 32 counties (Waterford is the odd one out ) - and Kennedy says that the company has "a great relationship" with all the counties and the clubs.

"Without their support we couldn't survive really, but we see it as a partnership, we work well with them and they are loyal to us."

Aside from the GAA, the company has a huge presence in the UK, where it sells to rugby clubs and supporters.

"We have a sales office in the north of England that services Rugby League and an office in Somerset that is mainly for Rugby Union and we would also have a lot of contracts with schools and colleges in the UK."

Further afield, the company also has sales offices in the south of France and in Australia, both targeting the rugby club market.

Its a hands-on element of the business. O'Neills mainly deals with the clubs directly. They agree their design, it gets signed off on, and then it is produced to the club's specifications.

"Again, it's all about personalisation, they have their own club crest and their sponsor and whatever colour they want."

Less than 11 months from Brexit, the potential disruption is of particular concern to a company with factories, supply chains and customers on both sides of the Border.

The main worry is the impact that a hard Brexit would have on its own supply chain, Kennedy says.

As things stand, O'Neills sources its yarn in the Far East, through Dublin Port. From there it goes to Northern Ireland, where it is machine-knit in Strabane. After that, the fabric is sent to Dublin to be dyed, before crossing the Border again to be cut and stitched in Strabane.

"In some cases, the products from start to finish could cross the Border up to eight times. If there were tariffs and duties it would have a major effect on our business.

"But at the minute we just don't know what's happening. We have been working on this closely but they just need to sort out what they are doing with the Northern Irish border because it is going to have a major effect on our own business and we can't really plan for something when we don't know what's happening.

"Hopefully, we will have some idea within the next few months.

"But from a business perspective we would like to remain within the single market and the customs union.

"Hopefully, the Tories stand up to the DUP and say 'right we are happy for the North of Ireland to make a special status for them' or have this regulatory alliance.

"At the end of the day we just live in hope. We don't know what we don't know, but definitely it is a major worry for us."

One potential plan, to deal with possible issues around warehousing and distribution, is an option to buy five acres of land in Donegal.

"If the worst comes to the worst and there are major issues we will move our warehouse and distribution two miles down the road," says Kennedy.

"We have plans in place but, hopefully, it won't come to that."

Kennedy also cites currency fluctuations as being a problem for the group. "Some 40pc of our staff come from Donegal, so in real terms they have had a 17pc decrease in their wages since this [Brexit] happened, although things are improving.

"Also there would be major concerns about delays at a possible the Border and staff getting to work."

When a company produces so many consumer products, there is always the risk of getting the market wrong and producing something that, in hindsight, was just not what customers were looking for.

However, Kennedy says that so far O'Neills has been able to avoid this trap.

"We have a good way of testing [the market], because we have so many routes to market and sales channels. We have a good test base for our products and the fact that we can control our production, we can make small runs and test the product first.

"If the product sells through and sells well we can repeat it, and then we can stop it when we want to stop it, but we try and change our ranges every year."

Mark Parker, chief executive of sportswear giant Nike, in 2014 famously claimed that "leggings are the new denim" referring to the rise in popularity of sports clothing as 'athleisure' wear.

With O'Neills enduring relationship with the GAA and rugby, and its expansion abroad, the plan is to continue producing sportswear for at least another 100 years.

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